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Judge Declines Final Rule in Harvard Divestment Suit

Jan Lee headshotWords by Jan Lee
Leadership & Transparency
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Last Friday Harvard University's legal team was in court to address what seems to have become iconic debate of our times: the financial support of the fossil fuel industry. Harvard Corporation, which oversees the university's investment portfolio, was sued last year by seven students who maintain that Harvard "has a legal obligation — and, more  importantly, a moral duty —to stop profiting from human suffering and environmental destruction." The group, which is representing itself, is succinct in its goal: "Our lawsuit simply asks Harvard to live up to its centuries-old promise to promote “the advancement of youth."

The issue of contention is Harvard's continued financial gain from investments in the fossil fuel industry, which the university defends as contributing to the endowments that further its scholastic efforts. Last year Harvard President Drew Gilpin Faust dismissed student requests for divestment, stating that the university needed to be“clear-sighted about the risks that divestment could pose to the endowment’s capacity to propel our important research and teaching mission.”

But the students are undeterred. They have opened a website called Harvard Climate Justice Coalition v. Harvard and has gained some hefty support from alumni and faculty and are gaining more media prominence each day. Last count, 200 faculty and more than 100 alumni had signed on to the divestment call.

The university's defense of its endowment strategies tugs at some well-worn issues that have been brought up on other university campuses as well. Last year the University of California defended its investments in fossil fuels by funding a grant of $1 billion to support research into climate change. The university promised it would "evaluate all strategies for achieving ESG goals as soon as practical," but has not divested. It gave the same reason as Harvard: anticipated financial losses for its endowment funds.

So does a university have an obligation to restrict its investment options if it has reason to believe that its programs will suffer? Some would argue that a university is in the business to educate, not necessarily to advocate. Unlike University of California, Harvard is a private school, with private funding overseen by a private corporation. Should it have the right to decide its investment strategies?

In this case, these budding lawyers and environmentalists seemed to put some thought into the what they see as the real issue at hand. Its business strategy they say, should be defined by what it says it is, not just by what it teaches in the classroom.

But it is a point of view that the state of Massachusetts Attorney General's office doesn't accept. The state is being sued as well, forced to take a stand on whether students who pay tuition to an institution have the right to expect certain conduct  in return.

In December the state and the university's filed a motion to dismiss the suit. The university states that the case is without merit because of a "lack of subject matter jurisdiction and failure to state a claim on which relief may be granted." Among other things, it has rejected the coalition's assertion that the university has "intentionally invested in 'abnormally dangerous activities'" and that this provides a basis for relief.

It may say volumes about the weight of the case that after Massachusetts Superior Court Judge Paul Wilson heard the vigorous arguments on both sides, he declined to rule. His stated that he would "take the matter to advisement," and give more consideration to the arguments.

Whether the plaintiffs win the case or not, their effort to force the pen of one of the country's oldest educational institutions will still leave a mark. Fossil fuel investments may still be popular, but perhaps not for institutions that champion a forward perspective toward business management. My bet is that we will see America's scholastic leaders moving away from controversial business strategies and choosing ones that underscore a more cooperative spirit to encourage enrollment. Whether that is a good strategy in itself is fodder for another good debate. But unlike a few years ago, climate change and the ramifications of fossil fuel investment seem to finally be a source for open discussion.

 Image: VirtualWolf

Jan Lee headshotJan Lee

Jan Lee is a former news editor and award-winning editorial writer whose non-fiction and fiction have been published in the U.S., Canada, Mexico, the U.K. and Australia. Her articles and posts can be found on TriplePundit, JustMeans, and her blog, The Multicultural Jew, as well as other publications. She currently splits her residence between the city of Vancouver, British Columbia and the rural farmlands of Idaho.

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